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Attorney Randy Ratliff

A / B Trusts

Skilled Estate Planning Lawyer Serving Nashville and Surrounding Communities

Depending upon a couple or individual’s particular situation, an effective estate plan may have several components, sometimes including an A/B trust or split trust. For some people, a trust may be helpful in order to maximize wealth to be passed on to a spouse, children, or other heirs or to minimize estate taxes. A trust is basically a fiduciary arrangement in which the trustor (sometimes called a “settlor”) turns over property to a trustee, who then manages the assets of the trust on behalf of the trust’s named beneficiary. Different types of trusts can be useful for different situations. Nashville estate planning lawyer Randy Ratliff helps clients throughout Davidson and Williamson Counties determine the best trust document – or other estate planning tool – for their particular needs. For example, a special needs trust can be of benefit in providing financial assistance to someone dependent on government aid like TennCare or Supplemental Security Income (SSI). On the opposite end of the financial spectrum, an A/B trust (sometimes called a “split trust”) can help people with a certain level of wealth minimize the effect of estate taxes.

When someone dies and passes on property, money, or other assets to his or her heirs, an estate tax or death tax may be triggered. While Tennessee has made changes to its state laws in an effort to phase out estate and death taxes, there is still a federal estate tax that applies to property transferred from a deceased person to his or her heirs. Of course, not every estate is subject to this type of federal taxation, since the vast majority of Americans are exempt from death taxes due to the relatively modest value of the assets that they leave behind. For people who find themselves in a financial position to qualify for federal estate taxation, however, the tax burden can be substantial. It is smart to discuss with a lawyer how you can minimize the amount of federal estate tax due upon your death. After all, you have worked hard for what you have, and you rightfully want to pass that wealth on to your spouse, children, and other beneficiaries.

Careful Estate Planning Can Minimize Taxes and Maximize Wealth

Just as there are ways to avoid the time and expense of formal probate, there are steps that can be taken to minimize an estate’s tax burden. One option is a credit shelter trust, in which one spouse can transfer a certain amount of wealth to a surviving spouse at the first spouse’s death without that portion of the overall estate being hit with a federal death tax. Another popular option is an A/B trust, or split trust.

An A/B trust can be drafted into a couple’s will if the value of their estate is expected to be such that it will be subject to the federal estate tax. After the first spouse’s death, a portion of his or her assets can be transferred into a bypass (or “B”) trust in order to protect funds up to the amount of the then-applicable federal tax exemption, with certain other assets going into a survivor’s trust (the “A” trust). The assets in the A trust are subject to the surviving spouse’s control but are not taxed until after his or her death.

Schedule an Appointment with an Experienced Trusts and Estates Attorney in Nashville

It takes careful planning to effectuate one’s wishes in a way that allows one’s heirs to retain the highest possible percentage of the assets that will go into one’s estate at death. At the Randy Ratliff Law Offices, PLLC, we help Davidson and Williamson County families review their financial and family situations with the goal of preserving as much hard-earned wealth as possible for those left behind. We welcome clients from Nashville, Antioch, Hermitage, Madison, Goodlettsville, Nashville, Joelton, Franklin, Brentwood, Cool Springs, and the surrounding areas. To set up a completely confidential review of your estate or asset protection plan with an attorney, call us at 615-656-8282 or contact us online.